Calculate your debt-to-income (DTI) ratio, the share of your gross monthly income that goes to debt payments, and see how lenders are likely to view it.
What is a debt-to-income ratio?
Your debt-to-income ratio (DTI) compares your monthly debt payments with your gross (pre-tax) monthly income. Lenders use it to judge whether you can comfortably take on a new loan.
DTI = Total monthly debt payments ÷ gross monthly income × 100
- Front-end DTI counts only housing costs (rent or mortgage, property tax, insurance, HOA).
- Back-end DTI counts housing plus all other debt payments. When people say "DTI", they usually mean this one.
Count required monthly payments such as car loans, student loans, credit card minimums, personal loans and child support. Do not count utilities, groceries, insurance premiums or subscriptions.
What is a good DTI?
| DTI | What it usually means |
|---|---|
| 36% or less | Healthy. Comfortable for most lenders. |
| 37% to 43% | Manageable. Many mortgages are still possible. |
| 44% to 50% | High. Fewer loan options, often stricter terms. |
| Over 50% | Very high. Paying down debt should come first. |
Exact limits vary by lender and loan program.
Worked example
Alex earns $6,000 a month before tax and pays $1,500 rent, $350 on a car loan, $200 in student loans and $100 in card minimums, a total of $2,150.
DTI = $2,150 ÷ $6,000 = 35.8%, just inside the 36% guideline. Front-end DTI is $1,500 ÷ $6,000 = 25%.
How to lower your DTI
- Pay off small debts entirely to remove their monthly payment. The debt snowball is built for this.
- Avoid new loans or financing before applying for a mortgage.
- Increase income with documented raises or side income.
- Refinance to a lower payment if the total cost still makes sense.
Frequently asked questions
Does DTI affect my credit score?
No. Income is not on your credit report. But lenders look at DTI and credit score together.
Should I use the minimum payment for credit cards?
Yes. Lenders use the minimum payment shown on your credit report, even if you pay more.
Related tools
Results are estimates for planning and education only. They are not financial, tax, legal or medical advice. Check important numbers with a qualified professional.